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Tax Structure, Size of Government, and the Extension of the Voting Franchise in Western Europe, 1860-1938

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  • Aidt, T.S.
  • Jense , P.S.

Abstract

We study the consequences of the extension of the voting franchise for the size of (central) government and for the tax structure in 10 Western European countries, 1860-1938. We show, .rstly, that the gradual relaxation of income and wealth restrictions on the right to vote contributed to growth in government spending and taxation. Secondly, we show that the impact of the franchise extension on the tax structure is conditional on tax collection costs. We find that the share of direct taxes (including the personal income tax) is positively affected by the franchise extension, but only if relative collection costs are below a given threshold. We use literacy as a proxy for the cost of levying a broad-based income tax.

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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0715.

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Length: 29
Date of creation: Apr 2007
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Handle: RePEc:cam:camdae:0715

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Keywords: Voting franchise; democracy; public finance; taxation.;

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Citations

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Cited by:
  1. Aidt, T. & Jensen, P.S., 2007. "The Taxman Tools Up: An Event History Study of the Introduction of the Personal Income Tax in Western Europe, 1815-1941," Cambridge Working Papers in Economics 0766, Faculty of Economics, University of Cambridge.
  2. Aidt, T.S. & Jensen, P.S., 2011. "Workers of the World, Unite! Franchise Extensions and the Threat of Revolution in Europe, 1820-1938," Cambridge Working Papers in Economics 1102, Faculty of Economics, University of Cambridge.
  3. Angelopoulos, Konstantinos & Economides, George & Kammas, Pantelis, 2012. "Does cabinet ideology matter for the structure of tax policies?," European Journal of Political Economy, Elsevier, vol. 28(4), pages 620-635.
  4. Mohammad Reza Farzanegan & Sajjad Faraji Dizaji, 2014. "Political Institutions and Government Spending Behavior in Iran," MAGKS Papers on Economics 201403, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Valentino Larcinese, 2014. "Enfranchisement and Representation: Evidence from the Introduction of Quasi-Universal Suffrage in Italy," Working Papers 512, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  6. Besley, Timothy J. & Persson, Torsten, 2013. "Taxation and Development," CEPR Discussion Papers 9307, C.E.P.R. Discussion Papers.
  7. Du Rietz, Gunnar & Johansson, Dan & Stenkula, Mikael, 2013. "The Evolution of Swedish Labor Income Taxation in a 150-year Perspective: An In-depth Characterization," Working Paper Series 977, Research Institute of Industrial Economics.
  8. James B. Davies & Stanley L. Winer, 2008. "Closing the 49th Parallel: An Unexplored Episode in Canadian Economic and Political History," University of Western Ontario, Economic Policy Research Institute Working Papers 20083, University of Western Ontario, Economic Policy Research Institute.
  9. Henrik Jacobsen Kleven & Claus Thustrup Kreiner & Emmanuel Saez, 2009. "Why Can Modern Governments Tax So Much? An Agency Model of Firms as Fiscal Intermediaries," NBER Working Papers 15218, National Bureau of Economic Research, Inc.
  10. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics 19212, University of Munich, Department of Economics.
  11. Toke Aidt & Peter Jensen, 2013. "Democratization and the size of government: evidence from the long 19th century," Public Choice, Springer, vol. 157(3), pages 511-542, December.
  12. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2013. "Democracy, Redistribution and Inequality," NBER Working Papers 19746, National Bureau of Economic Research, Inc.
  13. Mutascu, Mihai, 2012. "Influence of clime conditions on tax revenues," MPRA Paper 40324, University Library of Munich, Germany.
  14. Profeta, Paola & Puglisi, Riccardo & Scabrosetti, Simona, 2013. "Does democracy affect taxation and government spending? Evidence from developing countries," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 684-718.
  15. Valentino Larcinese, 2011. "Enfranchisement and Representation: Italy 1909-1913," STICERD - Economic Organisation and Public Policy Discussion Papers Series 032, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.

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